The Climate Change Committee Report 2022: EVs, EVCI and Buses - All aboard?

In the fourth instalment of our series examining the Climate Change Committee's (“CCC”) 2022 Progress Report to Parliament, we examine the findings relating to electric vehicles (“EVs”), EV charging infrastructure (“EVCI”), zero-emissions, and buses.

See the CCC's progress report here. See our previous articles on the CCC's report:

• “Actions speak louder than words”: reviewing the Climate Change Committee 2022 Report to Parliament
• The Climate Change Committee Report 2022: is decarbonising UK rail on the right track?
• The Climate Change Committee Report 2022: Energy Supply - A Rough Diamond

Contributing 23% of total UK emissions in 2021, tackling emissions from the “surface transport” sector i.e., cars, buses, trains, vans and HGVs, represents a major part of the net zero puzzle. According to the Sixth Carbon Budget set by the CCC in December 2020, compliance with their “Balanced Net Zero Pathway” would result in a reduction in emissions of around 70% by 2035 relative to 2019 levels. The Government has since set out its ambitions in relation to surface transport in a number of publications including the Net Zero Strategy, the Transport Decarbonisation Plan, the National Bus Strategy, The Williams-Shapps Plan for Rail, and the UK Electric Vehicle Infrastructure Strategy

.Progress and key messages EV sales - the CCC are generally positive about the growth in the electric vehicle market, as EV sales grew substantially during 2021 to 12% of the new car sales market, ahead of the CCC's projection of 8%. Electric van sales also grew by 87% in 2021, albeit from a low level. This success has been attributed in part to the strong progress made in EV policy mechanisms to deliver the transition to EVs. The Government has committed to introduce a zero-emission vehicle (“ZEV”) mandate from 2024 and the UK Electric Vehicle Infrastructure Strategy provides a credible pathway to enable the sector to scale up rapidly and equitably. However, the CCC raised concerns around EV monomania, highlighting that the surface transport sector's transition to net zero, “should not be all about replacing fossil-fuelled vehicles with electric ones”, advising that renewed focus should be placed on developing a policy framework for reducing traffic growth by encouraging active travel (i.e., walking and cycling) and increasing use of and confidence in public transport to reduce traffic growth.

EVCI delivery - the CCC were complimentary of the UK Electric Vehicle Infrastructure Strategy, finding it to be, “a credible delivery plan for realising this scale-up, identifying key roles and responsibilities and proposing approaches to overcome existing barriers to provision and use” and particularly crediting the Government for its revised focus on local authority delivery, drivers without off-street parking, and effective coordination across private and public entities to ensure a collaborative approach. The CCC affirmed that the Government's ambition for at least 300,000 public charge points across the UK by 2030 aligns with the CCC's assessment of how many will be needed to support forecast EV sales. However, the report called upon the Government to address the vast regional disparities in charge point provision and, in relation to the installation of charge points across the major road network, to review their initial target of 6,000 rapid chargers by 2035; the CCC have estimated that actual demand to match forecasted sales will be closer to 10,000.

Modal shift - the CCC's core commentary is that whilst the Government has made early soundings in policy papers and consultations, there is a lack of a coherent, overarching framework which is required to create a united vision for the future of these modalities to ensure that the committed funding is spent wisely and delivers maximum value. The CCC also reiterated that the key challenges will be in encouraging the public back to public transport in the aftermath of the COVID-19 pandemic, and ensuring that public transport fares undercut the cost of car travel; the CCC notes that demand currently remains at around 60-80% of 2019 levels and, given the current cost of living crisis, it may remain that way unless rising fares are addressed.

In Focus: EVs and EVC - IIt is hard to disagree with the CCC's analysis of the EV market and EVCI delivery. The most likely market focus for EVCI will be very large EV “superhubs”. The challenge in delivering such projects will be securing sufficient grid capacity to power them; many proposed projects will seek to utilise co-located generation and storage. On the demand side, the potential market for EVs is still stifled by the high cost of EVs versus traditional ICE vehicles; with an average price tag of c.£27,000 and, with many of the Government subsidies for electric vehicles falling away, EVs could remain a middle-class panacea for the decarbonisation of surface transport.A notable absence from the report is any discussion around hydrogen vehicles. With significant public and private capex in EVs and EVCI, it appears that the Government and business community have hedged their bets on the EV market. However, given the expenditure which will be required to deliver EVCI over the coming years, and the multitude of ever-increasing supply chain issues which continue to dog the industry, one does start to wonder whether the right horse has been backed. Whilst the cost of hydrogen production and the proliferation of hydrogen supply infrastructure will prove major stumbling blocks, the transition to hydrogen fuelled vehicles could prove far less costly in the long run as they are far more compatible with existing refuelling infrastructure and far quicker to refuel for consumers; the worst performing hydrogen vehicles can travel more than 50% further than leading EVs on a single tank versus a single charge. Additionally, hydrogen has already established itself as a front runner in respect of decarbonising the operation of large vehicles such as HGVs; EV batteries are heavy and due to the size of battery which would be required for a HGV, for instance, they are generally considered to be unsuitable.

In Focus: Bus and Coach

There is a dual focus to the Department for Transport's (“DfT”) National Bus Strategy: modal shift, particularly for short journeys, and ensuring bus services are zero emission.It is clear that the COVID-19 pandemic has had a deeply damaging effect on bus journey uptake. The psychological impact of the Government's messaging during the pandemic has eroded public confidence in the safety of buses. This has been compounded by the increase in working from home and the proliferation of online shopping, often circumventing the need for short journeys in the first place. The steps which are currently being taken by the DfT to address this include encouraging formal partnerships between combined authorities and local transport authorities with their local operators and, through these partnerships, developing the means of making the use of public transport more attractive. 31 local authorities across England are in the course of being funded under “Bus Service Improvement Plans” to introduce new initiatives, such as fare reduction schemes, incentives for group travel by bus, and wider availability of multi-operator ticketing products. Bus use in towns and cities will surely increase if potential passengers have a clear idea of the cost (and whether the cost will be capped in any way) and can be confident that they can use the next bus that turns up regardless of which operator they purchased their ticket from. It is, however, worth noting that local bus services are predominantly private sector operations and so investment decisions will not be in the hands of the DfT.Recognising that technological solutions are still in their relative infancy, the Government is stepping up its support for procurement activity through its Zero Emission Bus Regional Areas Scheme (“ZEBRA”) programme with a national target of 4,000 zero emission vehicles to come into service. £270 million has been allocated as a contribution to procurement costs for electric and hydrogen powered vehicles. Notable also, is the position in London with its franchise model and the early setting of a requirement by Transport for London that all buses provided through new tendered contracts must be zero emission.The coaching industry should not be overlooked. Operators are typically smaller enterprises providing travel for leisure and business contract hire. The industry, working through the Confederation of Passenger Transport, has the capability, but not currently the financial capacity, to lower carbon emissions by as much as 56 million tonnes over the next decade. Quite how investment can be leveraged into businesses of this kind remains an open question.

Conclusions

Whilst the CCC report paints a generally positive overview of the EV sector, the high cost of EVs to consumers and the potential of hydrogen-fuelled vehicles to present a serious challenge to the Government's EV-focussed doctrine has started to cause some concern that EVs and EVCI could eventually become relegated to the domain of the cassette player and the floppy disk.In respect of the bus sector, there can be little doubt that the ZEBRA programme has kick-started the zero-emission bus industry with major UK manufacturers regularly announcing new business wins. Question marks still exist over reliability for services that are designated as local but run longer routes. The expectation in the bus industry is that the technology will prove itself in time but a programme leading to the commissioning of charging facilities at terminus points is, perhaps, not receiving the expectation that it deserves. The coach industry requires a clear plan for investment in order to achieve its potential contribution to net zero combined, in the same way as with public transport, with behavioural change leading to increased patronage.

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